Whether we’re in the midst of a recession or simply enduring a rough patch in the economy, marketers are already taking action to ensure that products don’t suffer. That’s according to a new forecast released by Carat Insight as part of its Moving Forward report, which covers different aspects of media and marketer integration. Integration of the various media platforms will be key to advertisers during the coming year, as media people shift more funds to digital outlets and expand into new markets to hedge against potential declines in the U.S. Carat projects 3.8 percent growth of the ad economy in 2008 compared with 2007, with TV and online driving the gains. Internet will be up 17.5 percent, as will cinema ads, though from a much smaller base, while TV, including broadcast, cable and syndication, will grow 5 percent. Political and Olympic ads will contribute to TV’s rise, as a recent Carat poll found that more than a third of respondents are interested in TV coverage of the presidential election and Summer Games. Michelle Lynn, senior vice president at Carat Insight, talks to Media Life about lessons from the 2001 recession, what media people need to keep in mind, and why integration is key.
 

Generally speaking, what's the most important thing for media buyers and planners to keep in mind during uncertain economic times?
 
I think we have to remind everyone that a recession is a cycle with a beginning and end. The average recession has lasted about 11 months. Our job is to make sure that our clients are well positioned when the economy turns itself around.

For some clients, this may be an opportunity to be aggressive.

For planners and buyers, it’s a chance to demonstrate smart targeting and efficiency. We've learned that clients who stay active will maintain their market share and brand equity.

Are we in a recession? And does it really matter, since the perception out there is that we are? How do things differ from 2001?
 
It is hard to tell whether you are in a recession while it is actually happening. It is much easier to pinpoint the beginning and end of a recession after some time has passed. However, many experts think we are in one right now.

Perception plays a big part. If people think we are in a recession when in fact we are not, they nevertheless will tend to invest less and spend less, etc., so it becomes a self-fulfilling prophecy.

As far as 2001, that was a tech crash that eventually led to a wider market downturn. So I think it is very similar, with the credit crunch and real estate slump leading to wider market troubles. 

Also, typically, the ad industry generally lags the U.S economy by about a year.
 

You say marketers are responding to the current economy by making changes in their campaigns. What are they and how do they help?
 
We're starting to see an uptick in marketers encouraging trial through promotional offers and tactical advertising, which often happens in economic downturns. In tough times, consumers will pay for quality and security, so we should expect to see creative that highlights brand strengths through tactical comparison advertising.
 

How important is integration to effective marketing in a down economy? How much more do media people understand about this compared with seven years ago?
 
In a down economy, integration is extremely important as increased scrutiny is placed on budgets and where they are spent. From a consumer's point of view, these are all messages for one company regardless of the method of delivery.

We were talking about the same things seven years ago. There's just more to integrate now.
 

What sort of growth are you projecting for 2008 in television? Have you adjusted your forecast at all because of the potential recession?
 
Currently the local marketplace is sluggish. It is a buyer's market and we are not experiencing the type of rate increases usually associated with a political year. 

Automotive and retail, traditionally strong local categories, are flat to below last year. Indications are that the year will continue to be flat this year overall. For example, we have been able to maintain our annual cost-per-points for 2008, and in some cases lower them.
 
On the national side, the sluggish economy has not yet affected advertising volume. The scatter marketplace has been healthy (although they have slowed a bit from earlier in the year) and no significant money has been given back through cancellation options.
 
Moving forward, we see a continued migration of money to digital platforms and advertisers still striving to be less dependent on television.

However, although we anticipate less demand in the 2008-‘09 upfront from a year ago, the size of the drop will be dependent on the actions of the seven major categories that sometimes make up close to 80 percent of the total spend.

From that group, automotives would seem to be the most likely to cut back on their spending.

What have you seen thus far in terms of political advertising. Is it about where you expected it, up or down?
 
Again, political spending has been significantly less than anticipated based on spending in previous political years. Specific markets may see a stress on inventory due to political spending in third quarter and as we move closer to the election. However, these will be the exception, not the rule.
 

We've heard NBC Universal has been aggressive in selling across platforms for the Olympics. How will this year's sales compare with 2004?
 
NBC is coming to the table with cross-platform opportunities. However, they are willing to customize within those packages to fit a client's specific objectives on the local level. My opinion is that corporate national sponsors will continue to fund the majority of ad spend for the Olympics.
 
When all is said and done, 2008 Summer Olympic sales may surpass that for all previous years. It is true that NBC is telecasting more hours than ever before.

However, the Olympics remain a higher-rated premium event with strong viewer engagement. It should dominate against its competition and also serve as a great promotional platform for NBC programming. Numerous opportunities exist to extend a commercial message across both offline and online platforms, and we believe advertisers will take advantage of these.